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In this single-player simulation, students play the role of a business unit manager at a battery company facing the classic Innovator's Dilemma. Students have to manage R&D investment tradeoffs between the unit's existing battery technology versus investing in a new, potentially disruptive battery technology. Over the course of eight simulated years, students must address a number of challenges including the timing and level of investment across both mature and new businesses, choices regarding market opportunities and inherent product performance characteristics, requirements to meet constraining financial objectives and constant trade-offs between investment options, all in the context of uncertain market information. The entire simulation can be played in 1.5 seat hours, plus debrief. This second release of the web-based Strategic Innovation Simulation: Back Bay Battery combines the proven learning objectives and storyline of the original with an updated user experience and enhanced administrative features. A Teaching Note contains an overview of theory, simulation screens, and reference materials.

learning objective:

• Best opportunities for new products are not visible early on. New applications can appear unattractive, but often represent best long-term opportunity. • Timing and level of R&D spending is difficult to gauge. • Assessing emerging market opportunities is difficult using standard approaches. • Balancing dual requirements for simultaneously investing in core business and innovation is challenging. • Constraining financial criteria and an organization's impatience for growth can make innovation difficult.

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Reed Hastings founded Netflix with a vision to provide a home movie service that would do a better job satisfying customers than the traditional retail rental model. But as it encouraged challenges it underwent several major strategy shifts, ultimately developing a business model and an operational strategy that were highly disruptive to retail video rental chains. The combination of a large national inventory, a recommendation system that drove viewership across the broad catalog, and a large customer base made Netflix a force to be reckoned with, especially as a distribution channel for lower-profile and independent films. Blockbuster, the nation's largest retail video rental firm, was initially slow to respond, but ultimately rolled out a hybrid retail/online response in the form of Blockbuster Online. Aggressive pricing pulled in subscribers, but at a price to both it and Netflix. But a new challenge was on the horizon: video-on-demand. How should Netflix respond?

learning objective:

To support a discussion on disruptive vs. sustaining innovations, examine jobs-bases segmentation, and look at emergent strategy development.

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Rising labor costs in China and other emerging economies, high supply chain and logistics costs, and wide differentials in energy costs in different parts of the world are provoking a fresh round of relocation of manufacturing and production. While some labor-intensive jobs are moving out of China to Southeast Asia or the next emerging low-cost regions, some manufacturing work is also returning to the United States. Wal-Mart is facilitating reshoring efforts among its suppliers, and consultants are offering reshoring conferences, reports and lots of advice. While the data on comparative labor and factor costs may be compelling, reshoring -bringing assembly work back from abroad -is hard work, notes author Willy C. Shih. This is especially true when needed resources (the supplier base, the workforce and even the company's own internal product design capabilities) have atrophied. Shih studied several initiatives aimed at rebuilding regional capacity in the United States (including at GE's Appliance Park in Kentucky and two Flextronics International plants in Texas) and other examples in Europe and Asia to identify lessons about what works. The benefits were no surprise. Placing manufacturing close to the market minimizes inventory in the pipeline, reduces delivery times and shortens ordering cycles. The challenges were less apparent: the need to stabilize the workforce, address skill gaps, rethink the capital/labor ratio, localize the supply base and rethink product design to leverage the proximity to manufacturing. In many ways, Shih writes, the challenges of reshoring to the United States are the challenges of reshoring in any market in the world. Managers must design supply chains for the production of goods that balance proximity to diverse markets with the locations of their capabilities and their supply ecosystems. Doing that well, Shih argues, will always be a source of competitive advantage.

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Organizing speedy and efficient supply operations for unpredictable major natural disasters was a continuing challenge for the U.S. military, and the 2010 earthquake in Haiti was both unique in its operational scope and political complexity. As he reviewed the after-action reports, George Topic, the Vice Director of the Center for Joint and Strategic Logistics at the National Defense University wondered how the performance of disaster relief efforts should really be measured. How should the efficiency of the response be characterized? He wondered if they could overcome some of the hurdles to applying concepts from commercial supply chains. The case explores some of the lessons learned from the Haiti disaster, and offers an opportunity to test well-known supply chain concepts.

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Reed Hastings founded Netflix to provide a home movie service that would do a better job satisfying customers than the traditional retail rental model. But as it encountered challenges it underwent several major strategy shifts, ultimately developing a business model and an operational strategy that were highly disruptive to retail video rental chains. The combination of a large national inventory, a recommendation system that drove viewership across a broad catalog, and a large customer base made Netflix a force to be reckoned with, especially as a distribution channel for lower-profile and independent films. Blockbuster, the nation's largest retail video rental firm, was initially slow to respond, but ultimately rolled out a hybrid retail/online response in the form of Blockbuster Online. Aggressive pricing pulled in subscribers, but at a price to both it and Netflix. But a new challenge was on the horizon - the rapid growth of the company's online streaming service, which had a very different business model. Hastings' efforts to separate the activity into two separate companies met with strong pushback from consumers and the press. What was the best path forward?

learning objective:

Provide a setting for students to compare the business models of two companies, using theory constructs

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The American Airlines in 2011 case set was developed to provide a setting for the comparative analysis of two very different business models in the U.S. domestic airline industry -- the network carrier and the low cost carrier (LCC). These models offer very different value propositions. Firms allocate resources into distinctively different processes, and they earn returns using parallel but different profit models. Yet while most scholars view the LCC model as disruptive, the two different models have been able to co-exist for over forty years, albeit with substantial evolution. By unpacking how one of the major network carriers was able to evolve its model successfully for such a long time before industry structural changes necessitated a radical overhaul, the cases seek to give students insights into how the different business models were established, how competitive forces have driven their evolution, and the importance of constantly evolving and tuning a firm's model.

learning objective:

Provide a setting to examine how management evolves a business model in the face of disruptive innovation.

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To maximize their effectiveness, color cases should be printed in color.

MediaTek was the third largest fabless semiconductor company in the world, and was the second largest supplier of the silicon microchips that powered mobile phones. Yet as the company's chairman reflected on his R&D strategy, he wondered why it hadn't moved faster on the transition to smartphones. He also thought about what was on his firm's menu of choices, and what was on the menus of his competitors.

learning objective:

This case offers a setting to explore the impact of bounded choices in R&D portfolio decisions. The hope is for students to recognize the importance of the menu of choices facing managers, and how those choices make it onto the menu in the first place.

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To maximize their effectiveness, color cases should be printed in color.

BGI has the largest installed gene-sequencing capacity in the world, and to Zhang Gengyun, general manager of the Life Sciences Division, this represented an opportunity to apply his training as a plant breeder and his early career work as a biochemist to improving important parts of the world food supply. But his biggest challenge was in scaling up his organization to address the multitude of opportunities he wanted to address. Along with its massive investments in gene sequencing machines and computing resources for data analysis, BGI had built a large cadre of data scientists who could develop and run programs to sift through the mountains of genetic data that were being generated every day. But the approach raised other questions. Could people trained in traditional fields of botany, biochemistry, and animal husbandry simply use the BGI sequencing platform as a black box, much as people in other industries relied on specialization and a modular division of labor? Or did it take the kind of cross-training and cross-boundary work in which Zhang himself had invested two decades of his professional career? Could the data scientists in BGI's "factory" grow sufficiently to understand the science, and was that now even necessary?

learning objective:

This case provides students with an opportunity to apply important frameworks from the innovation literature on technological discontinuities and types of innovation (incremental, radical, modular, and architectural) to the changes sweeping the life sciences. Background information on the Human Genome Project, the development of high-speed sequencing methods, and the technology for mapping genes to physical traits helps students learn something about the biotech industry, as well as recognize the significant implications for firms in the affected sectors. Yet BGI's gene sequencing platform has triggered debate in the scientific community about its approach to training its scientific staff. Has their data-driven approached made the traditional hypothesis-driven scientific research obsolete, or is understanding the old way of working still a prerequisite to scientific progress?

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